I heard Jon Stewart the other night ask one of his guests if she thought George Bush was going to go nuts in his last months in office and invade Belgium or something. Since the NIE on the Iranian nuclear situation was released last fall, Iran has fallen off of the front pages.
Well, it’s time to put it back on – they have announced the opening of their very own oil bourse.
There are many reasons this is bad for the US, but the main one is timing. The US economy is straining on (or over, depending on who you ask) the precipice of a recession and can ill afford a hard shock, and this may well be a very hard shock indeed. Since the 70’s, oil has been priced in US dollars, effectively guaranteeing that any nation worth its salt would have to hold healthy sums of the greenback to protect its own currency and to guarantee the steady drip of liquid gold that makes the world go round. The US’ large trade deficit, mounting federal debt, and general softening economy have combined to put a heavy downward pressure on the dollar, making these dollar savings accounts worth less and less, and other currencies more and more attractive. Marketing crude in different currencies will provide still another reason for national governments to diversify US dollar holdings, and the additional currency on the market will further drive down its value.
It is hard to say right now how important this single measure is, but the uncertainty may well put Bush’s hand back on the red button, and Iran back on Fox News, if not the front page. There’s still time to get a good battle heated up, if not commenced, before January ’09.